Days Before Biden-Xi Meeting, US Tightens Restrictions On Chinese Tech Companies

The United States President Joe Biden signed legislation prohibiting Chinese telecoms companies such as Huawei and ZTE from acquiring new equipment licences from American regulators. This is the latest effort by Washington to target China's tech behemoths over national security concerns.

The Secure Equipment Act was unanimously approved by the United States Senate on 28 October and by the House of Representatives on a 420-4 vote earlier this month.

However, the signing of the legislation takes place only days before Biden and Chinese President Xi Jinping are set to meet virtually. The meeting is set to take place early next week, amid rising tensions over trade, human rights and military actions.

According to reports, the Federal Communications Commission (FCC) is no longer required to assess or approve any authorisation application for equipment that poses an unacceptable danger to national security under the new law.

Since 2018, the FCC has accepted more than 3,000 Huawei petitions, according to FCC Commissioner Brendan Carr.

He stated that the new legislation "will help to ensure that insecure gear from companies like Huawei and ZTE can no longer be inserted into America’s communications networks."

Under a 2019 law designed at securing American communications networks, the FCC classified five Chinese corporations as posing a national security concern in March this year. It included Huawei and ZTE, as well as Hytera Communications Corp, Hangzhou Hikvision Digital Technology Co and Zhejiang Dahua Technology Co.

Additionally, in June, Biden issued an executive order expanding the list of blacklisted Chinese corporations from 48 to 59, expanding a Trump-era limitation on Chinese surveillance firms with ostensible military ties.

Later, in June, the FCC voted unanimously to forward a plan to block approvals for equipment in United States telecommunications networks from those Chinese corporations, even as legislators pursued laws to demand it.

Beijing expressed its displeasure with the FCC vote in June and Zhao Lijian, a spokesperson at China's Foreign Ministry said: "The United States, without any evidence, still abuses national security and state power to suppress Chinese companies."

The FCC could potentially withdraw past equipment authorisations provided to Chinese corporations under proposed rules that received preliminary approval in June. At that time the Chinese telecom giant Huawei called the proposed revision "misguided and unnecessarily punitive".

However, in October this year, the FCC decided to remove China Telecom's American subsidiary's authorisation to operate in the US while citing national security concerns.

The FCC Commissioner warned that DJI, a Chinese drone manufacturer, was collecting massive troves of “sensitive data on Americans and US vital infrastructure, potentially operating as Huawei on wings”. According to reports, Shenzhen-based DJI controls more than half of the drone market in the US.